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French light-vehicle sales grow in January
IHS Markit perspective
- Implications: The positive start to 2018 for French light-vehicle sales follows in the footsteps of a continuing upswing during 2017. However, the registrations data also show an ongoing shift away from diesel during January.
- Outlook: IHS Markit anticipates that French passenger car demand will be up by about 1.1% y/y during 2018, while registrations of LCVs under 6 tonnes will be up by 2.6% y/y.
The light-vehicle market in France has seen a gain during the opening month of 2018. According to data published by trade association the Comité des Constructeurs Français d'Automobiles (CCFA), combined passenger car and light commercial vehicle (LCV) demand increased by 3.0% year on year (y/y) to 189,569 units in January. No working day factors came in to play.
On a standalone basis, passenger car registrations in January rose 2.5% y/y to 156,851 units. Both domestic OEMs contributed positively to growth in this category. However, once again the inclusion of the Opel brand in Groupe PSA's figures has been responsible for the double-digit percentage gain the automaker recorded during the month. Its registrations have grown by 18.5% y/y to 55,745 units, with this performance being helped by an additional 5,467 units from Opel, virtually the same number that it sold a year earlier when the brand was owned by General Motors (GM). However, a positive performance was put in by Peugeot (up 10.5% y/y to 31,526 units) and Citroën (up 2.7% y/y to 17,292 units), the latter being helped by the introduction of the C3 Aircross, which made up around 19% of the brand's sales during the month. However, DS Automobiles has continued to struggle before the launch of new models over the next few years. This brand's results were down by 13.7% y/y to 1,460 units during January.
The improvement at the Renault Group has been far more in line with the market as a whole. Its passenger car registrations grew by 2.9% y/y to 37,170 units in January. However, it was a contrasting month for the two brands under its control: Renault was down by 0.7% y/y to 27,282 units, while Dacia grew by 14.3% y/y to 9,888 units.
As for the other OEMs in the passenger car market, January was a mixed month. Volkswagen (VW) Group led the way for the non-domestic OEMs, but saw one of the biggest falls in the market place with a decline in registrations of 14.3% y/y to 16,646 units. Its performance was affected by a 17.7% y/y decline recorded by the VW brand to 8,656 units, while Audi recorded growth of only 28.3% y/y to 3,400 units. However, both the SEAT and Skoda brands partly offset this, with the former up by 4.4% y/y to 2,116 units and the latter up 15.5% y/y to 2,153 units, as both benefited from new introductions in the crossover space.
Nissan (down 7.9% y/y to 4,700 units) and Ford (down 2.6% y/y to 6,933 units) were two other OEMs which recorded declines during January, but other mainstream OEMs did better. These included Fiat Chrysler Automobiles (FCA; up 9.4% y/y to 6,761 units), Toyota (including Lexus, up 6.9% y/y to 8,474 units), Hyundai (up 17.0% y/y to 2,461 units), and Kia (up 8.4% y/y to 3,153 units).
It was a mixed month for the premium OEMs as well. Daimler registrations surged by 35.9% y/y to 3,303 units in January, as Mercedes recorded a 39.4% y/y improvement to 2,888 units. Volvo Cars' registrations also increased, by 9.5% y/y to 1,185 units. However, BMW Group saw its registrations flatten, with its demand dipping by 0.3% y/y to 5,907 units.
As for LCVs with a gross vehicle weight (GVW) of below 5.0 tonnes, registrations rose by 5.8% y/y to 32,718 units in January. Again, PSA's growth performance has been helped by Opel, its registrations in the month rising by 9.2% y/y to 12,165 units. However, even without this, its results would have been up by 4.6% y/y. Renault Group's registrations grew at around the market rate, but were still up by 5.2% y/y to 9,848 units.
Outlook and implications
Following a gain of 5.1% y/y over the course of 2017, the French light-vehicle market has opened its account for 2018 with this positive performance, which is likely to lead to some optimism over its performance for the full year. Underlying economic factors look set to be supportive of this, with indications that fourth quarter 2017 remained strong and that this is set to contribute to a 1.9% increase in French GDP this year, with IHS Markit expecting this rate of growth also to be seen in 2018. We also expect labour market conditions to improve in 2018, despite the surprising increase in the unemployment rate during the third quarter of 2017, as the economy is projected to grow above potential, and the unemployment rate should gradually move downward. Moreover, we also estimate that the labour reforms implemented in recent years, which have focused on injecting some flexibility into the system and lowering non-wage labour costs, should help boost employment creation over the medium term, although this improvement will be gradual. An improving labour market, alongside muted inflation, is expected to support private consumption spending, which is the traditional driver of the French economy.
However, one trend that looks set to continue reversing is the market share of diesel passenger car registrations. Indeed, the latest data released by the CCFA has indicated that the share in January fell to 41.1%, from 47.9% in January 2017. This was countered by a rise in gasoline (petrol) passenger car registrations, their market share having increased from 46.3% to 52.6%. Hybrids have also seen a noticeable growth, with the market share of this type of passenger car increasing from 4.3% to 5.3%, as plug-in types have a market share of 0.7%, up from 0.3%. However, the share of electric vehicles (EV) fell from 1.5% to 0.8% in January. Nevertheless, the general trend will see a shift away from diesel continue to some degree going forward, although this is likely to also mean that average carbon dioxide (CO2) levels from new vehicles are unlikely to retreat at the rate they have been, at least in the near term.
IHS Markit anticipates that France's light-vehicle registrations will see a gain during 2018, although the rate will be reduced. Passenger car demand is expected to be up by about 1.1% y/y. Registrations of LCVs under 6 tonnes are expected to grow by 2.6% y/y. Further, modest growth is anticipated in both categories during 2019.
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The above article is from AutoIntelligence Daily by IHS Markit. AutoIntelligence Daily provides same-day analysis of automotive news, events and trends. Get a free trial.
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